AES Corporation: Why The Stock Is Worth $30, With Or Without A Takeover

The stock of AES Corporation (AES) has languished near $14 in late 2025, a price that appears disconnected from the company's improving fundamentals and its strategic pivot toward renewables. Yet a closer look at its intrinsic value and the potential for debt restructuring suggests the stock could command a price closer to $30-even absent a takeover. This analysis combines valuation math, industry benchmarks, and AES's operational progress to build a compelling case for re-rating.

Intrinsic Value: A Case for a Higher Multiple

AES's intrinsic value hinges on its ability to command a premium multiple relative to the utilities sector. As of December 2025, the company trades at an enterprise value (EV) to EBITDA multiple of 14.0x, calculated using its $2.8 billion in trailing twelve months (TTM) EBITDA and a market cap of $9.8 billion . Meanwhile, the broader utilities sector averages an EV/EBITDA of 13.05x . This suggests AES is already priced at a slight premium to its peers. However, this premium is justified by its growth trajectory.

AES's 2025 guidance for Adjusted EBITDA of $2.65–$2.85 billion implies a forward EV/EBITDA of 13.8–14.3x, assuming its enterprise value remains stable. But the company's renewable energy projects and rate base growth at its U.S. utilities position it to outperform. For instance, its 11.1 GW power purchase agreement (PPA) backlog, with 5 GW under construction , could drive EBITDA growth beyond current estimates. If the market re-rates AES to a 16x multiple-a 200-basis-point premium to the sector average-its intrinsic value would rise to $16.8 billion, translating to a share price of $23.60. A more aggressive 18x multiple, achievable if its renewables portfolio accelerates, would push the price to $28.30 .

Debt Restructuring: A Catalyst for Equity Value

AES's debt burden remains a drag on equity valuation. With a $26.46 billion in long-term debt as of September 2025 and a debt-to-equity ratio of 8.99 , the company's capital structure is precarious. However, this also creates a compelling case for restructuring.

A debt exchange or asset monetization could reduce leverage and unlock value. For example, refinancing its $900 million in 2025-maturing senior notes would reduce interest costs, directly boosting net income. More ambitiously, a strategic sale of non-core assets-such as its Colombian or Mexican operations-could generate cash to retire debt or fund high-return renewables projects. Such moves would lower the debt-to-EBITDA ratio from its current 9.3x (using $26.46 billion debt and $2.85 billion EBITDA) to a more sustainable 6–7x, aligning AES with peers like NextEra Energy or Duke Energy.

Moreover, restructuring could address the dilution risks highlighted by skeptics. AES's $5.75 billion in other liabilities and potential equity issuance to fund growth could erode earnings per share (EPS). A debt-for-equity swap or bond buybacks would mitigate this, preserving EPS growth and supporting a higher stock price.

Strategic Progress: A Foundation for Confidence

AES's operational momentum further strengthens its case. Its U.S. utilities, including AES Indiana and AES Ohio, have secured rate base growth through regulatory approvals . Meanwhile, its Renewables SBU delivered "stronger performance" in Q3 2025, contributing to $830 million in Adjusted EBITDA . These trends suggest the company is transitioning from a high-debt, low-growth utility to a diversified energy player with recurring cash flows.

Critically, AES's focus on renewables aligns with decarbonization trends. Its 11.1 GW PPA backlog -a mix of solar, wind, and storage-positions it to benefit from long-term contracts with stable margins. This contrasts with traditional utilities, which face regulatory and fuel-price volatility.

Conclusion: A $30 Price Target Within Reach

Combining these factors, AES's intrinsic value is far higher than its current price. A 16x multiple on its 2025 EBITDA guidance implies a $23.60 share price, while a 18x multiple suggests $28.30. Add in the potential for debt restructuring to reduce leverage and unlock asset value, and a $30 target becomes plausible. Even without a takeover, AES's strategic shift toward renewables and its improving credit profile make it a compelling long-term investment.

[1] Fitch Rates AES Corporation's Unsecured Notes 'BBB-' [https://www.fitchratings.com/research/corporate-finance/fitch-rates-aes-corporation-unsecured-notes-bbb-12-03-2025]
[2] The AES Corporation (AES) - Long-Term Debt (Quarterly) [https://www.alphaquery.com/stock/AES/fundamentals/quarterly/long-term-debt]
[3] AES (The AES) Debt-to-Equity : 8.99 (As of Jun. 2025) [https://www.gurufocus.com/term/debt-to-equity/AES]
[4] AES Reports Third Quarter 2025 Results [https://www.nasdaq.com/press-release/aes-reports-third-quarter-2025-results-2025-11-04]
[5] AES Corporation: Debt And Dilution May Outpace Improving Fundamentals [https://seekingalpha.com/article/4799686-aes-corporation-debt-dilution-outpace-improving-fundamentals]
[6] AES Reports Third Quarter 2025 Results [https://www.prnewswire.com/news-releases/aes-reports-third-quarter-2025-results-302604695.html]
[7] Enterprise Value Multiples by Sector (US) [https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html]
[9] EV/EBITDA Multiple by Sector/Industry 2025 [https://siblisresearch.com/data/ev-ebitda-multiple/]